Brazil Seeks Credit Card Rules to Foment Competition

Brazil's central bank proposed new measures to stimulate competition in the credit-card market in Latin America's biggest economy.

The proposals, which weren't provided in detail, were sent to the government for consideration, according to a statement on the bank's Web site today.

"The commitment of the regulatory bodies is with the adoption of measures that will increase competition and transparency," the central bank said.

Market failures allowed Redecard SA, the Brazilian processor of Mastercard Inc., and Companhia Brasileira de Meios de Pagamento, known as Visanet, to post profits higher than what can be considered "fair," the central bank said in a March 31 report.

Redecard fell 0.3 percent to 27.17 reais at 10:32 a.m. New York time in the Sao Paulo trading. Cia. Brasileira de Meios de Pagamento slid 0.6 percent to 17.47 reais.

The proposals will ensure retailers will be able to use a single terminal to receive payments from different brands of credit cards, the central bank said. The measures also seek more "transparency" on certain credit card tariffs.

Visanet raised 8.4 billion reais ($4.72 billion) in the world's biggest IPO in more than a year in June 26.

The number of credit and debit cards in Brazil rose 12 percent in June to 540 million cards, from 482 million cards in June 2008, according to figures compiled by the Brazilian Credit Card Companies Association.